High street boom helps profits to rise at Next and Selfridges

Click to follow
The Independent Online

Next, the high street fashion retailer, underlined the strength of consumer spending yesterday when it reported a sharp rise in sales and profits alongside an upbeat assessment of prospects.

Next, the high street fashion retailer, underlined the strength of consumer spending yesterday when it reported a sharp rise in sales and profits alongside an upbeat assessment of prospects.

Sir Brian Pitman, Next's chairman, said: "I'm optimistic about the economy. People are still borrowing, we've got high employment and more and more two-income households. People want to buy things and get them now. I think we're in for another year when things will be favourable."

The sentiments were echoed by Selfridges, the department store group which reported a 16 per cent rise in full-year profits to £44.5m, before exceptionals. It said sales were starting to recover at its flagship store on London's Oxford Street following the sharp falls in tourist numbers after 11 September.

Peter Williams, Selfridges' finance director, said: "I thought things might have been weaker than they have turned out. But generally speaking people are in work and have the disposal income as their mortgages have never been lower. They've got it and they want to spend it."

Next's results were seen as particularly impressive in the City as the group was expected to be vulnerable to the recovery of Marks & Spencer. Next's profits for the year to January soared 22 per cent to £266m. Underlying sales were up by 9 per cent with Next Directory sales up by 20 per cent. The growth has continued into current trading with underlying sales up by 7 per cent in the stores and 31 per cent in the catalogue. The figures pushed Next shares up 7 per cent to a new high of 1,056p.

Simon Wolfson, chief executive, said he expected underlying sales growth to return to more normal levels of 3-5 per cent in the longer term. He said the group was budgeting conservatively but could always secure extra stock if needed.

More share buy-backs are planned with the £194m cash pile. Sir Brian will retire in May. David Jones, the deputy chairman, will succeed him.

Comments